Indonesia: Inflation stays muted in November, leaving the door open for a further rate cut
Consumer prices increased 0.14% in November over the prior month, building on October’s 0.02% rise. November’s reading was driven by higher prices for food, beverages and tobacco.
Inflation dipped to 3.0% in November from 3.1% in October, but remained well within Bank Indonesia’s target range of 3.5% plus or minus 1.0 percentage point, while core inflation dipped to 3.1% from 3.2%. Under-control inflation should allow Bank Indonesia to maintain a dovish monetary stance, something analysts at Nomura commented on:
“We continue to expect BI to cut its policy rate by another 25bp to 4.75% on 19 December. On-target inflation should allow BI to keep its focus on supporting growth momentum in the near term, given its clear pro-growth stance.”